Bausch Health(US:BHC)2021-11-02 18:27Financial Data and Key Metrics Changes - Total company revenue for Q3 2021 was $2.1 billion, down 1% on a reported basis and flat on an organic basis, with year-to-date revenue up 7% reported and 6% organically [16][11][10] - Adjusted EBITDA for the quarter was $885 million, down 9% on a constant currency basis from Q3 2020, with an adjusted EBITDA margin of 41.9% compared to 44.3% in Q3 2020 [34][32] - Cash generated from operations was $564 million on a GAAP basis, with adjusted cash generated from operations at $382 million for the quarter [36][11] Business Line Data and Key Metrics Changes - Bausch & Lomb segment revenue for Q3 was $949 million, up 3% organically, with Global Vision Care revenue at $226 million, up 6% organically [18][19] - Global Surgical business revenue was $173 million, up 13% organically, reflecting recovery in cataract and retina procedures [20] - Salix revenue was $527 million, up 6% from Q3 2020, driven by XIFAXAN, RELISTOR, and TRULANCE [23][26] - Global Consumer business revenue was $379 million, up 7% organically, with strong performance from LUMIFY and eye vitamins [21][46] - International Rx segment revenue was $271 million, down 1% organically, while Ortho Derm segment revenue was $140 million, down 3% organically [27][28] Market Data and Key Metrics Changes - International Vision Care growth was driven by key brands, with U.S. retail and e-commerce consumption up 4% from a year ago [19] - The U.S. experienced a 6% organic growth in the Global Surgical business, with international growth at 16% [20] - The long-term care market for XIFAXAN is recovering, with year-over-year growth now at 3% [80] Company Strategy and Development Direction - The company is pursuing strategic alternatives, including the proposed IPOs for Solta and Bausch & Lomb, aimed at unlocking shareholder value [8][60] - The company is focused on reducing debt, having repaid $1.1 billion in Q3 2021, with a net leverage of 6.4 times as of September 30, 2021 [38][39] - The company plans to launch XIPERE in Q1 2022 and anticipates filing an NDA for NOV03 in the first half of 2022 [54][53] Management's Comments on Operating Environment and Future Outlook - Management noted that recovery from COVID-19 is ongoing, with expectations for continued growth in Q4 and into 2022 [42][63] - The company is facing inflation and supply chain pressures, which may impact margins moving forward [43] - Management expressed confidence in the recovery trajectory and the potential for future growth driven by R&D advancements [55][90] Other Important Information - The company completed the sale of Amoun, its Egyptian pharma business, during the third quarter [15] - The company is contesting an IRS challenge related to a capital loss from a prior tax restructuring, with no tax liability expected [41] Q&A Session Summary Question: Can you provide insights on Solta's Q3 results and recovery in Southeast Asia and Europe? - Management indicated that Solta had a strong Q3 despite seasonal slowdowns, with year-to-date growth rates of 32% reported or 27% organic growth [67][68] Question: What is the timeline for the full separation of B&L post-IPO? - Management expects the full separation to occur within three to seven months after the IPO, subject to customary lockups and regulatory approvals [71][72] Question: How does the long-term care market impact XIFAXAN growth? - Management noted that the long-term care population is starting to regain, with XIFAXAN growth tracking at 3% year-over-year [80] Question: What are the growth drivers for Solta? - Management identified geographic expansion, portfolio expansion, and pipeline growth as key drivers for Solta's future growth [100] Question: How is the company managing R&D spend for Bausch Pharma? - Management emphasized a focus on profitable growth and ongoing investments in R&D for novel formulations and new indications [108][109]